Dry bulk freight earnings gain on iron ore congestion and Pacific coal chartering
- rorykevinproud
- Mar 17
- 4 min read
6 March 2025 Kpler
Iron Ore & Steel: Australian iron ore exports hit multi-year low due to Cyclone Zelia
Global seaborne iron ore exports slumped to 18.55 Mt in the week ending 16 February, marking a sharp 35% drop against the five-year average of 28.53 Mt. The drop was driven by Australian shipments plunging to their lowest level since at least 2017, as major ports, including Hedland, Dampier, and Walcott, were forced to pause operations for three days due to the tropical Cyclone Zelia. Kpler data shows that over 130 iron ore vessels were waiting to be loaded at Western Australian ports by the end of last week, the worst congestion in four years.
Rio Tinto, the world’s top iron ore producer, has estimated shipment losses of 13 Mt due to the cyclone-related disruptions. It aims to mitigate approximately half of these losses throughout the year. This aligns with our view that Q1 2025 shipments could hit a multi-year low. For now, the miner has upheld its 2025 guidance of 323-338 Mt but has stated that a full review will be conducted at the end of the quarter. We believe the lower end of the current annual guidance range (323 Mt) remains achievable, provided there is no further disruption.
Meanwhile, Mineral Resources (MinRes), Australia’s fifth-largest iron ore exporter, has revised down its FY2025 Onslow shipment guidance from 10.50-11.70 Mt to 8.80-9.30 Mt, citing significant flooding that damaged sections of the Onslow Iron haul road. This marks yet another setback for the Onslow project following a truck crash in November, with Kpler data showing weekly shipments from the site have slowed since mid-January. As a result, MinRes now expects the project to reach its full 35 Mtpa capacity in Q1 FY2026 (ending September) rather than Q4 FY2025 (ending June) as initially scheduled.
Iron ore prices have edged lower from last week’s multi-month highs as concerns over Australian supply disruptions ease, while renewed trade tensions—triggered by Trump’s latest tariff threats on autos—have weighed on sentiment. The SGX TSI Iron Ore CFR China (62% Fe Fines) fell 1.04% w/w to $106.69/t on 19 February, while the most active May 2025 contract on the DCE declined 1.21% w/w to 818 yuan/t ($112.31/t). We expect the SGX benchmark to hover around $105/t in the run-up to China’s annual “Two Sessions” in early March, with prices supported by fresh stimulus hopes. However, any disappointment in new policy measures could see the benchmark quickly retreat to the $100/t mark.
Australian iron ore exports plunged on Cyclone Zelia (Mt/week)
Coal: Lower prices weigh on mining revenues, coal becomes competitive against petcoke
Seaborne metallurgical coal deliveries rose by 500,000t w/w to 4.5 Mt last week, mainly driven by high demand from Japan and South Korea, while deliveries to India and China edged lower w/w.
Seaborne thermal coal imports rebounded to 16.8 Mt last week from a low base of 13.7 Mt the previous week, driven by a recovery in receipts from China and India.
The world’s largest thermal coal producer, Glencore, announced that it made a loss in 2024 owing to weaker coal prices and one-off impairment adjustments to its balance sheet. The company ruled out any immediate production cuts to its thermal and metallurgical coal production. Glencore’s latest guidance suggests thermal coal production will remain steady at around 100Mt until 2028. Thermal coal production is projected to fall after 2028 however, the company has not ruled out cutting output if market conditions deteriorate further. The company plans to produce around 30-35 Mtpa of metallurgical coal in the coming years, which aligns with its previous production levels and output from its latest metallurgical coal acquisition EVR’s mining assets.
Despite the recovery, China’s thermal coal receipts are on track to fall for the second consecutive month. Kpler data indicates aggregate receipts will be around 20-21 Mt, down from 23 Mt last year. Mining operations in China have restarted after the end of the spring festival, which should weigh on the need for imports, given that early indicators suggest that coal consumption from the power sector is lower than 2024 levels so far this year. Chinese metallurgical coal demand also faces headings. However, this is unlikely to have a significant impact on the seaborne market given Mongolia’s role as a supplier to China via rail route. Metallurgical coal stocks at the Ganqumaodu crossing are growing at a steep rate due to weak offtake.
Indian buyers also increased their thermal coal intake last week, with receipts from Indonesia, South Africa and the US gaining by 300-500,000t w/w to take aggregate receipts to 3.5Mt. The increase in US receipts coincides with petcoke’s eroding competitiveness into the country, as some traders are offering distressed Northern Appalachian coal cargoes into India at lower rates than petcoke on an energy-adjusted basis. Imports from the US rose to 400,000t last week, the highest since late May 2024.
India thermal coal imports from US (Mt)
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